by Justin M. Ross
February 27, 2014
Every tax instrument employed by a state or local government has wide-ranging implications for the economy and changes the over¬all design of the tax administration system in several distinct ways. This primer considers several of the most popular tax instruments of state and local govern¬ments, reviewing how each can contribute to the public revenue system in terms of economic efficiency, equity, transparency, collectability, and revenue produc¬tion. One recurring theme throughout each of these instruments is that there is no perfect tax that is unambiguously desirable because the criteria often conflict with one another. A second theme is that every tax instrument can be made worse through poor design. Policy advocates following good tax principles should have little trouble continuously finding areas of improvement in their own environment. Hopefully, this primer will aid such endeavors.